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Eyeing the money

Far Eastern Economic Review - January 21, 1999

Margot Cohen, Ujung Pandang – More than 30 years ago, Rahmat Hasanuddin boarded a canoe at a remote hamlet on the Indonesian island of Sulawesi and journeyed in search of higher education. Eventually he reached Ujung Pandang, the capital of South Sulawesi province; then he went on to Jakarta and even the United States, becoming a management consultant and academic along the way. Now he yearns for a triumphant return to his native soil and ethnic-Mandar roots – as the crusader for a new province called West Sulawesi, to be sliced away from existing South Sulawesi.

"If I don't do this now, I won't create history," muses Rahmat, 50, who is now rector of Cokroaminoto University in Ujung Pandang. "This is the moment!"

As reformasi throws open exciting opportunities for Indonesia's 27 provinces to gain political and fiscal autonomy, local interest groups are rushing forward with plans to create a raft of new provinces. These crusaders are not looking for independence – just a piece of the action. They aim to increase local prosperity by wresting control of natural resources and cutting deals directly with foreign investors.

Their cause is championed by Yusril Ihza Mahendra, an influential legal scholar and chairman of a new Muslim political party, Partai Bulan Bintang. He favours splitting Indonesia into 40 provinces, which, he says "would speed up development and simplify government."

The backers of wannabe provinces anticipate a sympathetic hearing from President B.J. Habibie, a Sulawesi native. Yet Habibie, who has not taken a public stance on the issue, will probably leave such weighty decisions to the new parliament formed after mid-year elections. "You can't expect a transitional government to play such dangerous games," says one top Habibie aide.

Many other Indonesians, including military leaders, fear that a proliferation of autonomous provinces could intensify ethnic rivalries and trigger a throwback to the bad old days of warring fiefdoms in the 16th to 18th centuries.

For their part, the technocrats in the central government are not averse to creating provinces. To ease administration, they already plan to subdivide three oversized ones: Irian Jaya, East Kalimantan and the Moluccan islands. But they caution that setting up new provinces is expensive, and that smart managers and public vigilance are necessary to ensure efficiency. "We can afford 34 provinces. We can't afford 40," says Herman Haeruman, deputy for regional development at the National Development Planning Agency. He calculates that each new province will need 100 billion rupiah ($12.7 million) for new government buildings. Adding 400 new civil servants per province will cost 2 billion rupiah a month.

But the crusaders believe they can come up with the money. Take Riau province, home to the Caltex oilfields, the Natuna gas field and the Batam island industrial centre. The province spans a piece of mainland Sumatra, plus an archipelago of 1,026 small islands. For years, island residents have gazed enviously at the more prosperous mainland, where Riau's provincial capital, Pekanbaru, calls the shots.

If the islanders push for their own province, they'll stake a claim to both Natuna and Batam, scooping up revenues that now flow to Jakarta. Huzrin Hood, a leader in Riau's chamber of commerce, says the would-be province could count on at least 400 billion rupiah right there. And business would pick up sharply, Huzrin adds, since the new province could negotiate directly with investors and traders from nearby Singapore and Johor. "With the governor in Pekanbaru, only those close to the governor get permits," he says.

The University of Riau held a packed seminar in September to stimulate public debate on the proposal to form a new province. And a new local magazine plans to poll the islanders, whose support for the proposal has yet to be gauged.

The would-be founders of West Sulawesi appear to be working in a stealthier fashion. They aim to take over a third of South Sulawesi, namely the regencies of Polmas, Majene and Mamuju. Most of the 850,000 residents are Mandar, a group related to the Malays but with their own language. Rahmat is preparing an application to submit to Habibie, and hopes the parliament chosen in mid-year elections will issue a speedy stamp of approval.

At present, few prospective West Sulawesians have a clue as to what is brewing. Instead of putting his case directly to the local people, Rahmat is busy lining up support among descendants of the traditional aristocracy who have no formal power but still command popular loyalty. And he has backing from some prominent ethnic Mandars living in Jakarta and Ujung Pandang.

The exiles share the same gripes: Over the last two decades, nobody of Mandar origin has served in the national parliament. Development budgets for the three regencies are skimpy. Roads and schools lag behind national standards. Revenue from the area's forests and mineral reserves could fill the gap, they say, if kept in local hands. And they dream of applying their skills to run things their way. "We have a lot of experts," Rahmat says happily. Would he like to be governor? "If the people choose me, no problem! But that's not my goal."